I just came across this post by chance. I thought it was an interesting read. Here is the link for the full piece:
http://web.archive.org/web/20061115070529/http://www.thebaffler.com/albiniexcerpt.html
http://web.archive.org/web/20061115070529/http://www.thebaffler.com/albiniexcerpt.html
III. Theres This Band
Theres this band. Theyre pretty ordinary, but 5. Trying to sound like the Beatles. Every record I hear these days has incredibly loud, compressed vocals, and a quiet little murmur of a rock band in the background. The excuse given by producers for inflicting such an imbalance on a rock band is that it makes the record sound more like the Beatles. Yeah, right. Fucks sake, Thurston Moore is not Paul McCartney, and nobody on earth, not with unlimited time and resources, could make the Smashing Pumpkins sound like the Beatles. Trying just makes them seem even dumber. Why cant people try to sound like the Smashchords or Metal Urbain or Third World War for a change?
III. Theres This Band
Theres this band. Theyre pretty ordinary, but theyre also pretty good, so theyve attracted some attention. Theyre signed to a moderate-sized independent label owned by a distribution company, and they have another two albums owed to the label.
Theyre a little ambitious. Theyd like to get signed by a major label so they can have some security you know, get some good equipment, tour in a proper tour bus nothing fancy, just a little reward for all the hard work.
To that end, they got a manager. He knows some of the label guys, and he can shop their next project to all the right people. He takes his cut, sure, but its only 15%, and if he can get them signed then its money well spent. Anyway, it doesnt cost them anything if it doesnt work. 15% of nothing isnt much!
One day an A&R scout calls them, says hes been following them for a while now, and when their manager mentioned them to him, it just clicked. Would they like to meet with him about the possibility of working out a deal with his label? Wow. Big Break time.
They meet the guy, and yknow what hes not what they expected from a label guy. Hes young and dresses pretty much like the band does. He knows all their favorite bands. Hes like one of them. He tells them he wants to go to bat for them, to try to get them everything they want. He says anything is possible with the right attitude. They conclude the evening by taking home a copy of a deal memo they wrote out and signed on the spot.
The A&R guy was full of great ideas, even talked about using a name producer. Butch Vig is out of the question he wants 100 gs and three points, but they can get Don Fleming for $30,000 plus three points. Even thats a little steep, so maybe theyll go with that guy who used to be in David Lettermans band. He only wants three points. Or they can have just anybody record it (like Warton Tiers, maybe cost you 5 or 10 grand) and have Andy Wallace remix it for 4 grand a track plus 2 points. It was a lot to think about.
Well, they like this guy and they trust him. Besides, they already signed the deal memo. He must have been serious about wanting them to sign. They break the news to their current label, and the label manager says he wants them to succeed, so they have his blessing. He will need to be compensated, of course, for the remaining albums left on their contract, but hell work it out with the label himself. Sub Pop made millions from selling off Nirvana, and Twin Tone hasnt done bad either: 50 grand for the Babes and 60 grand for the Poster Children without having to sell a single additional record. Itll be something modest. The new label doesnt mind, so long as its recoupable out of royalties.
Well, they get the final contract, and its not quite what they expected. They figure its better to be safe than sorry and they turn it over to a lawyer one who says hes experienced in entertainment law and he hammers out a few bugs. Theyre still not sure about it, but the lawyer says hes seen a lot of contracts, and theirs is pretty good. Theyll be getting a great royalty: 13% (less a 10% packaging deduction). Wasnt it Buffalo Tom that were only getting 12% less 10? Whatever.
The old label only wants 50 grand, and no points. Hell, Sub Pop got 3 points when they let Nirvana go. Theyre signed for four years, with options on each year, for a total of over a million dollars! Thats a lot of money in any mans english. The first years advance alone is $250,000. Just think about it, a quarter-million, just for being in a rock band!
Their manager thinks its a great deal, especially the large advance. Besides, he knows a publishing company that will take the band on if they get signed, and even give them an advance of 20 grand, so theyll be making that money too. The manager says publishing is pretty mysterious, and nobody really knows where all the money comes from, but the lawyer can look that contract over too. Hell, its free money.
Their booking agent is excited about the band signing to a major. He says they can maybe average $1,000 or $2,000 a night from now on. Thats enough to justify a five week tour, and with tour support, they can use a proper crew, buy some good equipment and even get a tour bus! Buses are pretty expensive, but if you figure in the price of a hotel room for everybody in the band and crew, theyre actually about the same cost. Some bands (like Therapy? and Sloan and Stereolab) use buses on their tours even when theyre getting paid only a couple hundred bucks a night, and this tour should earn at least a grand or two every night. Itll be worth it. The band will be more comfortable and will play better.
The agent says a band on a major label can get a merchandising company to pay them an advance on t-shirt sales! Ridiculous! Theres a gold mine here! The lawyer should look over the merchandising contract, just to be safe.
They get drunk at the signing party. Polaroids are taken and everybody looks thrilled. The label picked them up in a limo.
They decided to go with the producer who used to be in Lettermans band. He had these technicians come in and tune the drums for them and tweak their amps and guitars. He had a guy bring in a slew of expensive old vintage microphones. Boy, were they warm. He even had a guy come in and check the phase of all the equipment in the control room! Boy, was he professional. He used a bunch of equipment on them and by the end of it, they all agreed that it sounded very punchy, yet warm.
All that hard work paid off. With the help of a video, the album went like hotcakes! They sold a quarter million copies!
Here is the math that will explain just how fucked they are:
These figures are representative of amounts that appear in record contracts daily. Theres no need to skew the figures to make the scenario look bad, since real-life examples more than abound. Income is underlined, expenses are not.
Advance: $250,000
Managers cut: $37,500
Legal fees: $10,000
Recording Budget: $150,000
Producers advance: $50,000
Studio fee: $52,500
Drum, Amp, Mic and Phase Doctors: $3,000
Recording tape: $8,000
Equipment rental: $5,000
Cartage and Transportation: $5,000
Lodgings while in studio: $10,000
Catering: $3,000
Mastering: $10,000
Tape copies, reference CDs, shipping tapes, misc expenses: $2,000
Video budget: $30,000
Cameras: $8,000
Crew: $5,000
Processing and transfers: $3,000
Offline: $2,000
Online editing: $3,000
Catering: $1,000
Stage and construction: $3,000
Copies, couriers, transportation: $2,000
Directors fee: $3,000
Album Artwork: $5,000
Promotional photo shoot and duplication: $2,000
Band fund: $15,000
New fancy professional drum kit: $5,000
New fancy professional guitars (2): $3,000
New fancy professional guitar amp rigs (2): $4,000
New fancy potato-shaped bass guitar: $1,000
New fancy rack of lights bass amp: $1,000
Rehearsal space rental: $500
Big blowout party for their friends: $500
Tour expense (5 weeks): $50,875
Bus: $25,000
Crew (3): $7,500
Food and per diems: $7,875
Fuel: $3,000
Consumable supplies: $3,500
Wardrobe: $1,000
Promotion: $3,000
Tour gross income: $50,000
Agents cut: $7,500
Managers cut: $7,500
Merchandising advance: $20,000
Managers cut: $3,000
Lawyers fee: $1,000
Publishing advance: $20,000
Managers cut: $3,000
Lawyers fee: $1,000
Record sales: 250,000 @ $12 = $3,000,000 gross retail revenue Royalty (13% of 90% of retail): $351,000
less advance: $250,000
Producers points: (3% less $50,000 advance) $40,000
Promotional budget: $25,000
Recoupable buyout from previous label: $50,000
Net royalty: (-$14,000)
Record company income:
Record wholesale price $6.50 x 250,000 = $1,625,000 gross income Artist Royalties: $351,000
Deficit from royalties: $14,000
Manufacturing, packaging and distribution @ $2.20 per record: $550,000
Gross profit: $710,000
THE BALANCE SHEET
This is how much each player got paid at the end of the game.
Record company: $710,000
Producer: $90,000
Manager: $51,000
Studio: $52,500
Previous label: $50,000
Agent: $7,500
Lawyer: $12,000
Band member net income each: $4,031.25
The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month.
The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never recouped, the band will have no leverage, and will oblige.
The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, wont have earned any royalties from their t-shirts yet. Maybe the t-shirt guys have figured out how to count money like record company guys.
Some of your friends are probably already this fucked.
also pretty good, so theyve attracted some attention. Theyre signed to a moderate-sized independent label owned by a distribution company, and they have another two albums owed to the label.
Theyre a little ambitious. Theyd like to get signed by a major label so they can have some security you know, get some good equipment, tour in a proper tour bus nothing fancy, just a little reward for all the hard work.
To that end, they got a manager. He knows some of the label guys, and he can shop their next project to all the right people. He takes his cut, sure, but its only 15%, and if he can get them signed then its money well spent. Anyway, it doesnt cost them anything if it doesnt work. 15% of nothing isnt much!
One day an A&R scout calls them, says hes been following them for a while now, and when their manager mentioned them to him, it just clicked. Would they like to meet with him about the possibility of working out a deal with his label? Wow. Big Break time.
They meet the guy, and yknow what hes not what they expected from a label guy. Hes young and dresses pretty much like the band does. He knows all their favorite bands. Hes like one of them. He tells them he wants to go to bat for them, to try to get them everything they want. He says anything is possible with the right attitude. They conclude the evening by taking home a copy of a deal memo they wrote out and signed on the spot.
The A&R guy was full of great ideas, even talked about using a name producer. Butch Vig is out of the question he wants 100 gs and three points, but they can get Don Fleming for $30,000 plus three points. Even thats a little steep, so maybe theyll go with that guy who used to be in David Lettermans band. He only wants three points. Or they can have just anybody record it (like Warton Tiers, maybe cost you 5 or 10 grand) and have Andy Wallace remix it for 4 grand a track plus 2 points. It was a lot to think about.
Well, they like this guy and they trust him. Besides, they already signed the deal memo. He must have been serious about wanting them to sign. They break the news to their current label, and the label manager says he wants them to succeed, so they have his blessing. He will need to be compensated, of course, for the remaining albums left on their contract, but hell work it out with the label himself. Sub Pop made millions from selling off Nirvana, and Twin Tone hasnt done bad either: 50 grand for the Babes and 60 grand for the Poster Children without having to sell a single additional record. Itll be something modest. The new label doesnt mind, so long as its recoupable out of royalties.
Well, they get the final contract, and its not quite what they expected. They figure its better to be safe than sorry and they turn it over to a lawyer one who says hes experienced in entertainment law and he hammers out a few bugs. Theyre still not sure about it, but the lawyer says hes seen a lot of contracts, and theirs is pretty good. Theyll be getting a great royalty: 13% (less a 10% packaging deduction). Wasnt it Buffalo Tom that were only getting 12% less 10? Whatever.
The old label only wants 50 grand, and no points. Hell, Sub Pop got 3 points when they let Nirvana go. Theyre signed for four years, with options on each year, for a total of over a million dollars! Thats a lot of money in any mans english. The first years advance alone is $250,000. Just think about it, a quarter-million, just for being in a rock band!
Their manager thinks its a great deal, especially the large advance. Besides, he knows a publishing company that will take the band on if they get signed, and even give them an advance of 20 grand, so theyll be making that money too. The manager says publishing is pretty mysterious, and nobody really knows where all the money comes from, but the lawyer can look that contract over too. Hell, its free money.
Their booking agent is excited about the band signing to a major. He says they can maybe average $1,000 or $2,000 a night from now on. Thats enough to justify a five week tour, and with tour support, they can use a proper crew, buy some good equipment and even get a tour bus! Buses are pretty expensive, but if you figure in the price of a hotel room for everybody in the band and crew, theyre actually about the same cost. Some bands (like Therapy? and Sloan and Stereolab) use buses on their tours even when theyre getting paid only a couple hundred bucks a night, and this tour should earn at least a grand or two every night. Itll be worth it. The band will be more comfortable and will play better.
The agent says a band on a major label can get a merchandising company to pay them an advance on t-shirt sales! Ridiculous! Theres a gold mine here! The lawyer should look over the merchandising contract, just to be safe.
They get drunk at the signing party. Polaroids are taken and everybody looks thrilled. The label picked them up in a limo.
They decided to go with the producer who used to be in Lettermans band. He had these technicians come in and tune the drums for them and tweak their amps and guitars. He had a guy bring in a slew of expensive old vintage microphones. Boy, were they warm. He even had a guy come in and check the phase of all the equipment in the control room! Boy, was he professional. He used a bunch of equipment on them and by the end of it, they all agreed that it sounded very punchy, yet warm.
All that hard work paid off. With the help of a video, the album went like hotcakes! They sold a quarter million copies!
Here is the math that will explain just how fucked they are:
These figures are representative of amounts that appear in record contracts daily. Theres no need to skew the figures to make the scenario look bad, since real-life examples more than abound. Income is underlined, expenses are not.
Advance: $250,000
Managers cut: $37,500
Legal fees: $10,000
Recording Budget: $150,000
Producers advance: $50,000
Studio fee: $52,500
Drum, Amp, Mic and Phase Doctors: $3,000
Recording tape: $8,000
Equipment rental: $5,000
Cartage and Transportation: $5,000
Lodgings while in studio: $10,000
Catering: $3,000
Mastering: $10,000
Tape copies, reference CDs, shipping tapes, misc expenses: $2,000
Video budget: $30,000
Cameras: $8,000
Crew: $5,000
Processing and transfers: $3,000
Offline: $2,000
Online editing: $3,000
Catering: $1,000
Stage and construction: $3,000
Copies, couriers, transportation: $2,000
Directors fee: $3,000
Album Artwork: $5,000
Promotional photo shoot and duplication: $2,000
Band fund: $15,000
New fancy professional drum kit: $5,000
New fancy professional guitars (2): $3,000
New fancy professional guitar amp rigs (2): $4,000
New fancy potato-shaped bass guitar: $1,000
New fancy rack of lights bass amp: $1,000
Rehearsal space rental: $500
Big blowout party for their friends: $500
Tour expense (5 weeks): $50,875
Bus: $25,000
Crew (3): $7,500
Food and per diems: $7,875
Fuel: $3,000
Consumable supplies: $3,500
Wardrobe: $1,000
Promotion: $3,000
Tour gross income: $50,000
Agents cut: $7,500
Managers cut: $7,500
Merchandising advance: $20,000
Managers cut: $3,000
Lawyers fee: $1,000
Publishing advance: $20,000
Managers cut: $3,000
Lawyers fee: $1,000
Record sales: 250,000 @ $12 = $3,000,000 gross retail revenue Royalty (13% of 90% of retail): $351,000
less advance: $250,000
Producers points: (3% less $50,000 advance) $40,000
Promotional budget: $25,000
Recoupable buyout from previous label: $50,000
Net royalty: (-$14,000)
Record company income:
Record wholesale price $6.50 x 250,000 = $1,625,000 gross income Artist Royalties: $351,000
Deficit from royalties: $14,000
Manufacturing, packaging and distribution @ $2.20 per record: $550,000
Gross profit: $710,000
THE BALANCE SHEET
This is how much each player got paid at the end of the game.
Record company: $710,000
Producer: $90,000
Manager: $51,000
Studio: $52,500
Previous label: $50,000
Agent: $7,500
Lawyer: $12,000
Band member net income each: $4,031.25
The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month.
The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never recouped, the band will have no leverage, and will oblige.
The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, wont have earned any royalties from their t-shirts yet. Maybe the t-shirt guys have figured out how to count money like record company guys.
Some of your friends are probably already this fucked.
Theres this band. Theyre pretty ordinary, but 5. Trying to sound like the Beatles. Every record I hear these days has incredibly loud, compressed vocals, and a quiet little murmur of a rock band in the background. The excuse given by producers for inflicting such an imbalance on a rock band is that it makes the record sound more like the Beatles. Yeah, right. Fucks sake, Thurston Moore is not Paul McCartney, and nobody on earth, not with unlimited time and resources, could make the Smashing Pumpkins sound like the Beatles. Trying just makes them seem even dumber. Why cant people try to sound like the Smashchords or Metal Urbain or Third World War for a change?
III. Theres This Band
Theres this band. Theyre pretty ordinary, but theyre also pretty good, so theyve attracted some attention. Theyre signed to a moderate-sized independent label owned by a distribution company, and they have another two albums owed to the label.
Theyre a little ambitious. Theyd like to get signed by a major label so they can have some security you know, get some good equipment, tour in a proper tour bus nothing fancy, just a little reward for all the hard work.
To that end, they got a manager. He knows some of the label guys, and he can shop their next project to all the right people. He takes his cut, sure, but its only 15%, and if he can get them signed then its money well spent. Anyway, it doesnt cost them anything if it doesnt work. 15% of nothing isnt much!
One day an A&R scout calls them, says hes been following them for a while now, and when their manager mentioned them to him, it just clicked. Would they like to meet with him about the possibility of working out a deal with his label? Wow. Big Break time.
They meet the guy, and yknow what hes not what they expected from a label guy. Hes young and dresses pretty much like the band does. He knows all their favorite bands. Hes like one of them. He tells them he wants to go to bat for them, to try to get them everything they want. He says anything is possible with the right attitude. They conclude the evening by taking home a copy of a deal memo they wrote out and signed on the spot.
The A&R guy was full of great ideas, even talked about using a name producer. Butch Vig is out of the question he wants 100 gs and three points, but they can get Don Fleming for $30,000 plus three points. Even thats a little steep, so maybe theyll go with that guy who used to be in David Lettermans band. He only wants three points. Or they can have just anybody record it (like Warton Tiers, maybe cost you 5 or 10 grand) and have Andy Wallace remix it for 4 grand a track plus 2 points. It was a lot to think about.
Well, they like this guy and they trust him. Besides, they already signed the deal memo. He must have been serious about wanting them to sign. They break the news to their current label, and the label manager says he wants them to succeed, so they have his blessing. He will need to be compensated, of course, for the remaining albums left on their contract, but hell work it out with the label himself. Sub Pop made millions from selling off Nirvana, and Twin Tone hasnt done bad either: 50 grand for the Babes and 60 grand for the Poster Children without having to sell a single additional record. Itll be something modest. The new label doesnt mind, so long as its recoupable out of royalties.
Well, they get the final contract, and its not quite what they expected. They figure its better to be safe than sorry and they turn it over to a lawyer one who says hes experienced in entertainment law and he hammers out a few bugs. Theyre still not sure about it, but the lawyer says hes seen a lot of contracts, and theirs is pretty good. Theyll be getting a great royalty: 13% (less a 10% packaging deduction). Wasnt it Buffalo Tom that were only getting 12% less 10? Whatever.
The old label only wants 50 grand, and no points. Hell, Sub Pop got 3 points when they let Nirvana go. Theyre signed for four years, with options on each year, for a total of over a million dollars! Thats a lot of money in any mans english. The first years advance alone is $250,000. Just think about it, a quarter-million, just for being in a rock band!
Their manager thinks its a great deal, especially the large advance. Besides, he knows a publishing company that will take the band on if they get signed, and even give them an advance of 20 grand, so theyll be making that money too. The manager says publishing is pretty mysterious, and nobody really knows where all the money comes from, but the lawyer can look that contract over too. Hell, its free money.
Their booking agent is excited about the band signing to a major. He says they can maybe average $1,000 or $2,000 a night from now on. Thats enough to justify a five week tour, and with tour support, they can use a proper crew, buy some good equipment and even get a tour bus! Buses are pretty expensive, but if you figure in the price of a hotel room for everybody in the band and crew, theyre actually about the same cost. Some bands (like Therapy? and Sloan and Stereolab) use buses on their tours even when theyre getting paid only a couple hundred bucks a night, and this tour should earn at least a grand or two every night. Itll be worth it. The band will be more comfortable and will play better.
The agent says a band on a major label can get a merchandising company to pay them an advance on t-shirt sales! Ridiculous! Theres a gold mine here! The lawyer should look over the merchandising contract, just to be safe.
They get drunk at the signing party. Polaroids are taken and everybody looks thrilled. The label picked them up in a limo.
They decided to go with the producer who used to be in Lettermans band. He had these technicians come in and tune the drums for them and tweak their amps and guitars. He had a guy bring in a slew of expensive old vintage microphones. Boy, were they warm. He even had a guy come in and check the phase of all the equipment in the control room! Boy, was he professional. He used a bunch of equipment on them and by the end of it, they all agreed that it sounded very punchy, yet warm.
All that hard work paid off. With the help of a video, the album went like hotcakes! They sold a quarter million copies!
Here is the math that will explain just how fucked they are:
These figures are representative of amounts that appear in record contracts daily. Theres no need to skew the figures to make the scenario look bad, since real-life examples more than abound. Income is underlined, expenses are not.
Advance: $250,000
Managers cut: $37,500
Legal fees: $10,000
Recording Budget: $150,000
Producers advance: $50,000
Studio fee: $52,500
Drum, Amp, Mic and Phase Doctors: $3,000
Recording tape: $8,000
Equipment rental: $5,000
Cartage and Transportation: $5,000
Lodgings while in studio: $10,000
Catering: $3,000
Mastering: $10,000
Tape copies, reference CDs, shipping tapes, misc expenses: $2,000
Video budget: $30,000
Cameras: $8,000
Crew: $5,000
Processing and transfers: $3,000
Offline: $2,000
Online editing: $3,000
Catering: $1,000
Stage and construction: $3,000
Copies, couriers, transportation: $2,000
Directors fee: $3,000
Album Artwork: $5,000
Promotional photo shoot and duplication: $2,000
Band fund: $15,000
New fancy professional drum kit: $5,000
New fancy professional guitars (2): $3,000
New fancy professional guitar amp rigs (2): $4,000
New fancy potato-shaped bass guitar: $1,000
New fancy rack of lights bass amp: $1,000
Rehearsal space rental: $500
Big blowout party for their friends: $500
Tour expense (5 weeks): $50,875
Bus: $25,000
Crew (3): $7,500
Food and per diems: $7,875
Fuel: $3,000
Consumable supplies: $3,500
Wardrobe: $1,000
Promotion: $3,000
Tour gross income: $50,000
Agents cut: $7,500
Managers cut: $7,500
Merchandising advance: $20,000
Managers cut: $3,000
Lawyers fee: $1,000
Publishing advance: $20,000
Managers cut: $3,000
Lawyers fee: $1,000
Record sales: 250,000 @ $12 = $3,000,000 gross retail revenue Royalty (13% of 90% of retail): $351,000
less advance: $250,000
Producers points: (3% less $50,000 advance) $40,000
Promotional budget: $25,000
Recoupable buyout from previous label: $50,000
Net royalty: (-$14,000)
Record company income:
Record wholesale price $6.50 x 250,000 = $1,625,000 gross income Artist Royalties: $351,000
Deficit from royalties: $14,000
Manufacturing, packaging and distribution @ $2.20 per record: $550,000
Gross profit: $710,000
THE BALANCE SHEET
This is how much each player got paid at the end of the game.
Record company: $710,000
Producer: $90,000
Manager: $51,000
Studio: $52,500
Previous label: $50,000
Agent: $7,500
Lawyer: $12,000
Band member net income each: $4,031.25
The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month.
The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never recouped, the band will have no leverage, and will oblige.
The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, wont have earned any royalties from their t-shirts yet. Maybe the t-shirt guys have figured out how to count money like record company guys.
Some of your friends are probably already this fucked.
also pretty good, so theyve attracted some attention. Theyre signed to a moderate-sized independent label owned by a distribution company, and they have another two albums owed to the label.
Theyre a little ambitious. Theyd like to get signed by a major label so they can have some security you know, get some good equipment, tour in a proper tour bus nothing fancy, just a little reward for all the hard work.
To that end, they got a manager. He knows some of the label guys, and he can shop their next project to all the right people. He takes his cut, sure, but its only 15%, and if he can get them signed then its money well spent. Anyway, it doesnt cost them anything if it doesnt work. 15% of nothing isnt much!
One day an A&R scout calls them, says hes been following them for a while now, and when their manager mentioned them to him, it just clicked. Would they like to meet with him about the possibility of working out a deal with his label? Wow. Big Break time.
They meet the guy, and yknow what hes not what they expected from a label guy. Hes young and dresses pretty much like the band does. He knows all their favorite bands. Hes like one of them. He tells them he wants to go to bat for them, to try to get them everything they want. He says anything is possible with the right attitude. They conclude the evening by taking home a copy of a deal memo they wrote out and signed on the spot.
The A&R guy was full of great ideas, even talked about using a name producer. Butch Vig is out of the question he wants 100 gs and three points, but they can get Don Fleming for $30,000 plus three points. Even thats a little steep, so maybe theyll go with that guy who used to be in David Lettermans band. He only wants three points. Or they can have just anybody record it (like Warton Tiers, maybe cost you 5 or 10 grand) and have Andy Wallace remix it for 4 grand a track plus 2 points. It was a lot to think about.
Well, they like this guy and they trust him. Besides, they already signed the deal memo. He must have been serious about wanting them to sign. They break the news to their current label, and the label manager says he wants them to succeed, so they have his blessing. He will need to be compensated, of course, for the remaining albums left on their contract, but hell work it out with the label himself. Sub Pop made millions from selling off Nirvana, and Twin Tone hasnt done bad either: 50 grand for the Babes and 60 grand for the Poster Children without having to sell a single additional record. Itll be something modest. The new label doesnt mind, so long as its recoupable out of royalties.
Well, they get the final contract, and its not quite what they expected. They figure its better to be safe than sorry and they turn it over to a lawyer one who says hes experienced in entertainment law and he hammers out a few bugs. Theyre still not sure about it, but the lawyer says hes seen a lot of contracts, and theirs is pretty good. Theyll be getting a great royalty: 13% (less a 10% packaging deduction). Wasnt it Buffalo Tom that were only getting 12% less 10? Whatever.
The old label only wants 50 grand, and no points. Hell, Sub Pop got 3 points when they let Nirvana go. Theyre signed for four years, with options on each year, for a total of over a million dollars! Thats a lot of money in any mans english. The first years advance alone is $250,000. Just think about it, a quarter-million, just for being in a rock band!
Their manager thinks its a great deal, especially the large advance. Besides, he knows a publishing company that will take the band on if they get signed, and even give them an advance of 20 grand, so theyll be making that money too. The manager says publishing is pretty mysterious, and nobody really knows where all the money comes from, but the lawyer can look that contract over too. Hell, its free money.
Their booking agent is excited about the band signing to a major. He says they can maybe average $1,000 or $2,000 a night from now on. Thats enough to justify a five week tour, and with tour support, they can use a proper crew, buy some good equipment and even get a tour bus! Buses are pretty expensive, but if you figure in the price of a hotel room for everybody in the band and crew, theyre actually about the same cost. Some bands (like Therapy? and Sloan and Stereolab) use buses on their tours even when theyre getting paid only a couple hundred bucks a night, and this tour should earn at least a grand or two every night. Itll be worth it. The band will be more comfortable and will play better.
The agent says a band on a major label can get a merchandising company to pay them an advance on t-shirt sales! Ridiculous! Theres a gold mine here! The lawyer should look over the merchandising contract, just to be safe.
They get drunk at the signing party. Polaroids are taken and everybody looks thrilled. The label picked them up in a limo.
They decided to go with the producer who used to be in Lettermans band. He had these technicians come in and tune the drums for them and tweak their amps and guitars. He had a guy bring in a slew of expensive old vintage microphones. Boy, were they warm. He even had a guy come in and check the phase of all the equipment in the control room! Boy, was he professional. He used a bunch of equipment on them and by the end of it, they all agreed that it sounded very punchy, yet warm.
All that hard work paid off. With the help of a video, the album went like hotcakes! They sold a quarter million copies!
Here is the math that will explain just how fucked they are:
These figures are representative of amounts that appear in record contracts daily. Theres no need to skew the figures to make the scenario look bad, since real-life examples more than abound. Income is underlined, expenses are not.
Advance: $250,000
Managers cut: $37,500
Legal fees: $10,000
Recording Budget: $150,000
Producers advance: $50,000
Studio fee: $52,500
Drum, Amp, Mic and Phase Doctors: $3,000
Recording tape: $8,000
Equipment rental: $5,000
Cartage and Transportation: $5,000
Lodgings while in studio: $10,000
Catering: $3,000
Mastering: $10,000
Tape copies, reference CDs, shipping tapes, misc expenses: $2,000
Video budget: $30,000
Cameras: $8,000
Crew: $5,000
Processing and transfers: $3,000
Offline: $2,000
Online editing: $3,000
Catering: $1,000
Stage and construction: $3,000
Copies, couriers, transportation: $2,000
Directors fee: $3,000
Album Artwork: $5,000
Promotional photo shoot and duplication: $2,000
Band fund: $15,000
New fancy professional drum kit: $5,000
New fancy professional guitars (2): $3,000
New fancy professional guitar amp rigs (2): $4,000
New fancy potato-shaped bass guitar: $1,000
New fancy rack of lights bass amp: $1,000
Rehearsal space rental: $500
Big blowout party for their friends: $500
Tour expense (5 weeks): $50,875
Bus: $25,000
Crew (3): $7,500
Food and per diems: $7,875
Fuel: $3,000
Consumable supplies: $3,500
Wardrobe: $1,000
Promotion: $3,000
Tour gross income: $50,000
Agents cut: $7,500
Managers cut: $7,500
Merchandising advance: $20,000
Managers cut: $3,000
Lawyers fee: $1,000
Publishing advance: $20,000
Managers cut: $3,000
Lawyers fee: $1,000
Record sales: 250,000 @ $12 = $3,000,000 gross retail revenue Royalty (13% of 90% of retail): $351,000
less advance: $250,000
Producers points: (3% less $50,000 advance) $40,000
Promotional budget: $25,000
Recoupable buyout from previous label: $50,000
Net royalty: (-$14,000)
Record company income:
Record wholesale price $6.50 x 250,000 = $1,625,000 gross income Artist Royalties: $351,000
Deficit from royalties: $14,000
Manufacturing, packaging and distribution @ $2.20 per record: $550,000
Gross profit: $710,000
THE BALANCE SHEET
This is how much each player got paid at the end of the game.
Record company: $710,000
Producer: $90,000
Manager: $51,000
Studio: $52,500
Previous label: $50,000
Agent: $7,500
Lawyer: $12,000
Band member net income each: $4,031.25
The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $14,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7-11, but they got to ride in a tour bus for a month.
The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never recouped, the band will have no leverage, and will oblige.
The next tour will be about the same, except the merchandising advance will have already been paid, and the band, strangely enough, wont have earned any royalties from their t-shirts yet. Maybe the t-shirt guys have figured out how to count money like record company guys.
Some of your friends are probably already this fucked.
